Top Research Reports For Microsoft, Mastercard & General Electric
Zacks Investment Research | Mar 08, 2019 01:24AM ET
Friday, March 8, 2019
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Microsoft (MSFT), Mastercard (MA) and General Electric (GE). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
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Microsoft’s shares have gained +14.3% in the past year, outperforming the Zacks Computer Software industry’s gain of +12.2% during the same period. The Zacks analyst thinks Microsoft is benefiting from growing user base of its different applications like Office 365 commercial, Dynamics, Outlook mobile and Teams.
Robust execution and better-than-expected demand from customers for hybrid cloud offerings is a positive. Moreover, Azure’s expanding customer base is a key catalyst. Microsoft’s gaming segment is performing well, primarily driven by a combination of Xbox Live, Game Pass subscriptions and Mixer, which are driving user engagement.
Further, acquisitions like PlayFab and GitHub expand Microsoft’s TAM and penetration. However, projections of a moderating growth rate in commercial cloud gross margin, and OEM Pro and Windows commercial businesses is a headwind. Also, competition is stiff and its dominant position in the PC market continues to be challenged.
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Shares of Mastercard’s shares have increased 21.4% over the past year, significantly outperforming the Zacks Financial Transaction Services industry’s rally of 11%. The Zacks analyst thinks the company is poised for growth, given its solid market position, ongoing expansion and digital initiatives, plus significant opportunities from the secular shift toward electronic payments.
Its numerous acquisitions have aided revenue growth. However, escalating costs will put pressure on the company’s bottom line. Also, in order to gain customers and new business, Mastercard has been incurring quite high levels of costs under rebates and incentives, which remains a concern. Nevertheless, its strong balance sheet enables business investment, thereby driving growth.
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General Electric’s shares have outperformed the Zacks Diversified Operations industry in the past three months (+36.3% vs. +11.8%). The Zacks analyst thinks the company is poised to become more competent on the back of its portfolio-restructuring program. In sync with this, it intends to focus on just three core businesses — Power, Aviation and Renewable Energy — and gradually exit all others.
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Moreover, the company has slashed its dividend from 12 cents per share to a penny (for improving its cash position) and plans to reorganize the Power business into two separate units. However, weakening Power business remains a key cause of concern for the company. General Electric expects that internal and external challenges will continue to hurt this business arm.
Also, the company’s margins have been affected due to lower profits secured from its Renewable Energy business. Over the past seven days, the Zacks Consensus Estimate for the company’s earnings has remained unchanged for both 2018 and 2019.
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Other noteworthy reports we are featuring today include Glaxo (GSK), Target (TGT) and Brown-Forman (BF.B).
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Senior Editor
Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly
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Featured Reports/h6
The Zacks analyst likes Glaxo's efforts to boost its pipeline, especially oncology. However, a generic of its top-selling drug, Advair was approved in February which can erode its sales in 2019.
Per the Zacks analyst, Edison International's substantial investments in infrastructural upgrades should boost its performance. Yet frequent wildfires and other calamities tend to push up its costs.
Per the Zacks analyst, Realty Income will gain from solid investments and focus on service, non-discretionary and low-price retail business tenants.
The Zacks analyst is optimistic about solid gains from Cooper's core CVI unit, which performed impressively in the United States, the EMEA and the Asia Pacific.
Per the Zacks analyst, Nordstrom is aggressively focusing on its store-expansion strategy to drive top line and expand market share
The Zacks analyst appreciates the company's efforts to modernize its fleet.
Per the Zacks analyst, Boyd Gaming recent acquisition of Valley Forge Casino Resort and Pinnacle Assets will drive growth in the coming quarters.
The Zacks analyst likes Glaxo's efforts to boost its pipeline, especially oncology. However, a generic of its top-selling drug, Advair was approved in February which can erode its sales in 2019.
Per the Zacks analyst, Edison International's substantial investments in infrastructural upgrades should boost its performance. Yet frequent wildfires and other calamities tend to push up its costs.
Per the Zacks analyst, Realty Income will gain from solid investments and focus on service, non-discretionary and low-price retail business tenants.
The Zacks analyst is optimistic about solid gains from Cooper's core CVI unit, which performed impressively in the United States, the EMEA and the Asia Pacific.
Per the Zacks analyst, Nordstrom is aggressively focusing on its store-expansion strategy to drive top line and expand market share
The Zacks analyst appreciates the company's efforts to modernize its fleet.
Per the Zacks analyst, Boyd Gaming recent acquisition of Valley Forge Casino Resort and Pinnacle Assets will drive growth in the coming quarters.
New Upgrades/h6
Per the Zacks analyst, diligent execution of operational strategies, including business diversification and global scale leverage, alongside positive industry dynamics should boost Ciena's top line.
Per the Zacks analyst, Target's omnichannel efforts, diversification of assortments and flexible format stores bode well. The company's Restock Program is also gaining traction.
Per the Zacks analyst, Brown-Forman's investments in the brands portfolio include broadening of the Jack Daniel's family, while exiting weak brands will boost the company.
Per the Zacks analyst, diligent execution of operational strategies, including business diversification and global scale leverage, alongside positive industry dynamics should boost Ciena's top line.
Per the Zacks analyst, Target's omnichannel efforts, diversification of assortments and flexible format stores bode well. The company's Restock Program is also gaining traction.
Per the Zacks analyst, Brown-Forman's investments in the brands portfolio include broadening of the Jack Daniel's family, while exiting weak brands will boost the company.
New Downgrades/h6
Per the Zacks analyst, Dominion's share dilution due to acquisitions and delay in completion of the Atlantic Coast Pipeline will adversely impact performance of the company.
Per the Zacks analyst, Equity Residential's growth tempo is likely to slow down amid elevated supply of apartments. Further, there is high concession activity in the market which remains a concern.
Lackluster show by PharMEDium and Lash units plague AmerisourceBergen. The Zacks analyst is also apprehensive about other headwinds like conversion of branded drugs and lower price generics.
Per the Zacks analyst, Dominion's share dilution due to acquisitions and delay in completion of the Atlantic Coast Pipeline will adversely impact performance of the company.
Per the Zacks analyst, Equity Residential's growth tempo is likely to slow down amid elevated supply of apartments. Further, there is high concession activity in the market which remains a concern.
Lackluster show by PharMEDium and Lash units plague AmerisourceBergen. The Zacks analyst is also apprehensive about other headwinds like conversion of branded drugs and lower price generics.
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